“I have received a complaint from a customer asking me about ADR. I don’t know what they are talking about, but do I have to do anything”
What is ADR
Alternative Dispute Resolution (ADR) is a way of solving disputes between dealers and consumers that does not involve the Court process. ADR has been gaining ground as a way to resolve disputes since around 2000. This culminated with The Alternative Dispute Resolution Regulations 2015 which puts a requirement on businesses to offer and consider ADR (but not necessarily to agree to it)
There are 2 main forms of ADR are:
- 1. Mediation, where an independent mediator sits between the parties to try and reach a resolution; or
- 2. Arbitration, where an independent third party considers evidence from both sides and then gives a binding decision on the parties.
It has become noticeable that there has been an increased utilisation of ADR, particularly through organisations such as the RMI’s own National Conciliation Service (NCS). This can be a cost effective and a timely route to solve disputes.
Do I Have to use it?
ADR can be a cost effective and a timely route to solve disputes. The Courts will look favourably on parties that engage in ADR as indeed this is built into their Court process. This can be seen in Small Claims actions as the parties are requested to consider Small Claims mediation before a Small Claims trial hearing takes place.
Indeed, the RMI code of conduct itself has ADR built into it and details of the National Conciliation Service can be found on the RMI’s website. If you are a Bosche dealer or sign up to The Motoring Ombudsman these also include ADR.
If you sign up to a code of conduct which includes ADR you are required to :-
- 1. Include details of the ADR process on your website, and within your terms and conditions.
- 2. Include details of the ADR process in any letter to a consumer where you have exhausted your internal complaints process.
Whilst you are required to refer a member to an ADR scheme, you are not required to reach an agreement, unless you have signed up in advance to a form of arbitration.
As always, this advice is general in nature. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Please contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
